Proposed new EU rules on sustainability reporting and assurance: what’s covered?
The European Commission has presented long-awaited and comprehensive legal proposals paving the way towards enhanced sustainability disclosures for a large swathe of companies operating in Europe.
The EU’s move comes at the same time as growing global attention to sustainability reporting in the run-up to COP26.
Since 2018, EU rules have required large entities to include a non-financial statement as part of their annual reporting obligations. Responding to growing demands for enhanced non-financial information from multiple quarters – and following a large stakeholder consultation – the Commission has now adopted far-reaching legislative proposals to review its existing Non-Financial Reporting Directive (NFRD) and improve the flow, comparability and reliability of sustainability information.
The proposed Corporate Sustainability Reporting Directive (CSRD) seeks to mandate sustainability reporting and assurance by amending several EU laws, including the Accounting Directive, Transparency Directive, and Audit Directive. As the Commission makes clear, the ultimate aim is over time to “bring sustainability reporting on a par with financial reporting.”